On May 31, 2006, the government and private sector of the Lao PDR held the country’s first business forum. The meeting, which was coordinated by IFC’s Mekong Private Sector Development Facility (MPDF), brought together nearly 300 representatives from the private sector, government, and donor communities of Laos to review progress in addressing private sector issues.
Developments at the forum included:
- A government announcement on exemption of some shipments of imported goods from time-consuming and expensive inspection at a government warehouse;
- An agreement that trucks coming into Laos can maintain their loads as originally packed, with no transshipment required, as long as packing and documentation are up to international standards;
- An agreement to raise the weight limit on trucks traveling on roads that are built for higher weights;
- A decision to purchase two additional planes for the national carrier, so that there are more flights and seats available within the country; and
- The government’s promise to consult with the private sector prior to making any decision about a joint venture with a foreign airline.
The Lao Business Forum was launched in March 2005 by IFC’s MPDF, in collaboration with the government’s Committee for Planning and Investment and the Lao National Chamber of Commerce and Industry. Its main goals are to improve the country’s business enabling environment by providing a platform for dialogue between business and government, as well as to facilitate information-sharing with potential investors.
Like forums IFC coordinates in Vietnam and Cambodia, the Lao Business Forum has three functions:
- To identify common problems facing a particular sector and establish possible solutions. This is done by working groups and is open to anyone from the private sector.
- To identify top priority issues that the working group and related government officials agree to resolve. This is done by a government-appointed inter-ministerial team and representatives from each of the working groups.
- To showcase what has been achieved or is under discussion, relevant research, and issues that need consideration by the highest levels of government. This involves the formal business forums held twice a year and chaired by the country’s Deputy Prime Minister.
Over the past year, MPDF, which serves as the forum’s secretariat, has recruited members for three working groups focusing on manufacturing, trade and services, and tourism. MDPF has facilitated the meetings of these groups, helped them analyze issues, and conducted research. MDPF facilitated meetings in January between each working group and the government’s inter-ministerial team to agree on priority issues to resolve. These issues and the steps taken in resolving them are listed in a matrix that makes it easy to track progress. A fourth private sector working group that focuses on energy and mining has recently begun to hold meetings.
In the months leading up to the May 31 event, several key changes were made to the Lao PDR’s administrative procedures and regulations. For example, instead of obtaining government approval for each shipment, importers paying a 1 percent import duty now need government approval only once a year.
In the tourism sector, visas granted on arrival have been extended from 15 to 30 days, and the government has stepped up enforcement of noise regulations on speed boats near key tourist destinations such as Luang Prabang. The government has also agreed to collect a new $1-per-tourist tax itself rather than require accommodation providers to do this.
Pending issues, among many others, include: increasing the supplies of wood available to furniture manufacturers; reducing a high incidence of smuggling that makes it challenging for local manufacturers to compete; making extensions of tourist visas available outside the capital; and a wide range of improvements on taxation, intellectual property, and other aspects of business regulation.
For further information contact:
Ann Bishop
Phnom Penh
Tel: (855-23) 210 922
E-mail: abishop1@ifc.org
